Vale Breaks 4Q Iron Ore Record - Analyst Blog

Recently,
Vale S.A.
(
VALE
), a metals and mining company announced an encouraging
production report for the fourth quarter 2012, including a record
breaking iron ore performance.

Vale saw a year-over-year increase in production across some
of its products including iron-ore, coal and phosphates in the
fourth quarter 2012. However, production of other items like
pellets, ferroalloys, manganese ore, nickel, copper, potash and
nitrogen declined year over year during the period.

This quarter also witnessed a record breaking fourth quarter
performance for iron ore. Iron ore production grew 3.1% year over
year and 1.9% sequentially. Usually, the iron ore production is
the minimum in the fourth quarter of any year due to seasonality.
This is the first time since 2003, that the company has seen
positive sequential growth in the fourth quarter. Lower than
expected rainfall and a significant contribution from N5 South
mine in Carajás boosted production significantly.

In coal, production of metallurgical coal grew 25.3% in the
fourth quarter, while thermal coal increased 10.8% year over
year. This incredibly high rate of yield was a result of improved
performance in the mines of Australia, especially in its Integra
Coal mine.

Ferroalloys production suffered by as much as 44.6% year over
year due to the closure of the European ferroalloys operations in
October 2012. Copper and nickel declined by 4.6% and 6.6%,
respectively, in the quarter due to a disruption of Sudbury
mining operations.

Around two weeks ago, another natural resources company,
BHP Billiton Plc.
(
BHP
), reported its modest production report for six months ending
December 2012 with an increase in almost all of its business
segments.

Vale is expected to announce its fourth quarter and 2012
results on Feb 11, 2013. The Zacks Consensus Estimate stands at
49 cents and $2.13 for the fourth quarter and 2012,
respectively.